The RIAA Really is Greedy
Elliot has some great commentary on Itunes vs. the music industry. It seems that "big music" is looking to squeeze more money out of teenagers with disposable income and Itunes isn't hearing a word of it:
Elliot's point on supply and demand is fantastic! Supply is basically infinite. You can argue bandwidth issues until you're blue in the face. The reality is that supply of this digital media far, far outweighs demand. Economics 101 teaches us that this should drive price down. How far? Well, if supply is basically infinite and demand is finite, does this mean that the market price should be almost zero? "So," asks the teenager in Anywhere, USA facing an RIAA lawsuit, "what's wrong with file sharing?"
I'm with Elliot on this one. Itunes has every right to determine their own prices. The RIAA and MPAA need to stop acting like bullies and start thinking about a marketing strategy that works in the digital age.
This really pisses me off, because the labels already make more money per track from an iTunes sale than they do when they sell a CD.Not only is Itunes charging more per song (unless you buy a complete album), they're selling an inferior product! The music on Itunes is compressed. The format is good, but it's not as clean as CD. Of course, some will argue that CD is not as good as vinyl; but those people tend to live in dark basements under their parents' homes.
Plus, there’s no “supply and demand” argument that you can use for charging more for more popular songs because there is no scarcity to drive up the cost.
With digital music there is an unlimited supply of every song.
Elliot's point on supply and demand is fantastic! Supply is basically infinite. You can argue bandwidth issues until you're blue in the face. The reality is that supply of this digital media far, far outweighs demand. Economics 101 teaches us that this should drive price down. How far? Well, if supply is basically infinite and demand is finite, does this mean that the market price should be almost zero? "So," asks the teenager in Anywhere, USA facing an RIAA lawsuit, "what's wrong with file sharing?"
I'm with Elliot on this one. Itunes has every right to determine their own prices. The RIAA and MPAA need to stop acting like bullies and start thinking about a marketing strategy that works in the digital age.
3 Amendments:
Hey aaron when I try to pass Econ for the 4th time will you be my tutor? I'm economically challenged!
Actually... if you listened to Aaron's economic theory, you'd fail the class.
It has nothing to do with supply and demand. It has to do with the price the market is willing to bear (bare?)... whatever. You can charge as much as you want as long as there are willing buyers.
I said pretty much the same thing over at Elliot's place. You keep increasing the price until people stop buying the product. Even if a few people refuse, as long as the increase in the price offsets the loss of sales, you keep increasing the cost.
If you graph it out, you'll see a theoretical optimum price where you maximize profit. Supply and Demand is an important economic driver, but it's certainly not the only one.
Huh? That is why I failed 3 times already:) I have tried all 3 types too micro, macro and regular I just can get the concept of "guns & Butter"
Funny Word Verification = Houmo
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